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Wednesday, August 12, 2009

Greens on trial and 'the Governor' is named

The trial of Hollywood producer Gerald Green and his wife Patricia began last week in Los Angeles. The couple are charged with violating the U.S. Foreign Corrupt Practices Act and accused of paying US$1.8 million in bribes to a Thai government official in exchange for contracts, among them for management of the Bangkok International Film Festival.

Defendants Gerald and Patricia Green routinely agreed to, and arranged, payments from a group of Beverly Hills businesses, which they owned and controlled, for the benefit of Juthamas Siriwan ("Juthamas"), the Governor of the Tourism Authority of Thailand ("TAT"). The payments, which totaled approximately $1,8 million over more than four years were in connection with Juthamas' award of, and support for, TAT and TAT-related contracts for promotion of tourism that resulted in approximately $14 million in revenue to defendants businesses. The corrupt payments took place by transfers into the overseas bank accounts of Juthamas' daughter, Jittisopa Siriwan ("Jittisopa"), aka uJib," Juthamas' friend, Kitti Chambundabongse ("Kitti") [BP: Google away the name!], and occasionally by cash delivery to Juthamas in person. Defendants owed Juthamas these corrupt payments as a variable percentage of revenue on TAT-related contracts and subcontracts including, but not limited to, the Bangkok International Film Festival.

Before posting to the blog, BP was a-Twittering away, calling out the Thai press for not covering the Greens' case and its connections to Juthamas, a former leader of the Peua Pandin political party. "If [fugitive former prime minister] Thaksin was to go to pick his nose and it was mentioned in some obscure foreign paper, it would make the papers [in Thailand]," BPretorted.

Things are getting hot for Juthamas Siriwan, former governor of the Tourism Authority of Thailand, as local and overseas investigations point to her as being a key player in the Bangkok International Film Festival bribery scandal.

Piyawat Kingket, chief of the Department of Special Investigation's special crimes unit, said yesterday that evidence has been found locally to implicate suspects, including Jutamas, who has consistently and vehemently denied any involvement in allegedly taking kickbacks while she was overseeing the film festival.

The case, which involved bribery and budgets that were within Jutamas's power to approve, has been forwarded to the National Anti-Corruption Commission, which is expected to make a decision soon on how to proceed, Piyawat said.

The trial of two Hollywood producers accused of trying to bribe their way into running the Bangkok International Film Festival is now under way at the US Federal District Court in Los Angeles, and, for the first time, Jutamas's name has cropped up in the court transcripts.

The local case, however, has not incorporated any accounts from American investigators who questioned producer Gerald Green and his wife Patricia, who stand accused in the US of violating the Foreign Corrupt Practices Act in connection with the film festival.

Getting the US investigators' interrogation records would be a lengthy bilateral process, Piyawat said.

The FBI, however, did seek cooperation from Thailand when launching its probe of the couple during the Surayud government.

The Greens' case is the first use of the FCPA in the entertainment industry, and is being watched closely by film industry folks. It could have a chilling effect on Hollywood doing business not only in Thailand but in other countries as well.

The L.A. Times' Company Town blog cites analysis of the budget for the action film Sahara, saying "$237,386 was spent on 'courtesy payments,' 'gratuities' and 'local bribes'."

You do have a recipe here,” says lawyer and former DOJ corruption-enforcement official Jonathon Drimmer, “where the outcome of the Green case could become an instigator of addition scrutiny of the entertainment industry by the Department of Justice. Like they have with the medical device industry and the oil services industry, they could begin to pursue industry-wide cases based on an investigation of one on a practice that may be repeated by others.

“I’d look very close at my internal controls and books, because the Green case is just the kind of spark to lead to a much brighter spotlight on the film industry.”

In Thailand, industry insiders are sensitive about it, because foreign films shooting on location is big business. According to the Thailand Film Office, foreign productions generate US$56.8 million a year.

I don't know how much of that comes from Hollywood, but behind Indian and Japanese productions, I'd guess it's a pretty fair chunk.

Update: According to the Thailand Film Office, only a small percentage of that actually comes from the U.S. industry, which lags far behind Japan, India and Europe in making movies in Thailand. In 2008, out of 526 productions, only 25 were American.

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